A private sector survey on Tuesday (5 November) showed that India's service sector activity declined for the second straight month in October, the first back-to-back reduction since the second quarter of fiscal year 2017-18.
The finance, insurance, real estate, and business services acted as the main drag on the Indian services economy, where both business activity and sales contracted.
The Markit India Services Business Activity Index for October stood at 49.2. An index below 50 is indicative of contraction.
The data for October indicated that demand weakness was centred in the domestic market, with exporters posting an increase in international sales but the upturn in external demand was modest and the slowest in four months, the survey said.
"Registering 49.2 in October, the IHS Markit India Services Business Activity Index signalled a second consecutive decline in output. However, rising from 48.7 in September, the headline figure was indicative of a marginal and slower rate of reduction," survey said.
Consumer services was the brightest spot, posting strong output growth and new work. Besides, service sector employment increased for the twenty sixth month in a row, albeit at the joint-slowest pace over this period.
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